Senators Seek Fatted CAF

A group of more than three dozen Senators from both parties, led by Amy Klobuchar (D-Minn.), have called on the FCC to address the budget shortfall in the Universal Service Fund's high-cost subsidies.

The subsidies go to mostly rural areas where there is no business case for building out networks given the sparsity of customers per mile. FCC chair Ajit Pai has made closing the rural digital divide a priority.

In reorienting the high-cost fund in 2011 to support broadband -- dubbed the Connect America Fund, or CAF -- under Democratic chair Julius Genachowski, the FCC also put the fund on a budget, a move Pai supports. Pai has long argued that capping telecom subsidies is both fiscally responsible and a way to fight waste, fraud and abuse.

In their letter to Pai and the other commissioners, the senators praised FCC efforts to "strengthen and streamline" the high-cost fund, but said the fund needs financial help as well.

“A lack of resources to meet our [shared national broadband] goals is undermining investment and consumer access to affordable broadband across much of rural America," they said. "For this reason, we write to encourage the FCC to take the much-needed step of addressing the High-Cost Universal Service Fund budget shortfall.

"Earlier this year, approximately 160 members of Congress raised similar concerns in letters to the FCC," they added. "Since these letters were sent, many providers have continued to experience a significant reduction in support. In the ensuing months, many of us have continued to press the FCC to resolve these concerns. We believe that the FCC is best positioned to identify a solution to the budget shortfall that is limiting access to reliable and affordable broadband in rural communities."

They said they recognize that a long-term solution will take time and asked that, in the short term, the FCC at least not reduce the funding.

Also earlier this year, commissioners Michael O'Rielly and Mignon Clyburn teamed up to seek input on an idea for making sure the money already budgeted to high-cost support was getting to the people who really needed it by means-testing the recipients.

"We should end the practice of spending scarce USF [Universal Service Fund] high-cost support to illogically subsidize the cost of communications services for very rich people who happen to live in the more rural portions of our nation," the commissioners wrote in May.